The Gold Report
Gold futures fell to a three-month low in New York as a strengthening dollar reduced demand for the precious metal as an alternative investment.
The dollar rose against a basket of six major currencies and traded at an eight-month high against the euro. Gold sank 4.4% yesterday and is headed for a fourth straight weekly loss, while the dollar is up for the third consecutive week.
"The dollar just keeps gaining momentum," said Tom Schweer, a senior market strategist at LaSalle Futures Group Inc. in Chicago. "Realistically, gold could fall another $20 to $40 before people start to load up again."
Gold futures for April delivery fell $4, or 0.4%, to $1,059 an ounce at 11 a.m. on the Comex division of the New York Mercantile Exchange. Yesterday, gold's $49 loss was the biggest percentage drop for a most-active contract since Dec. 1, 2008. The metal is down more than 2% this week.
"Yesterday's global margin-call will reverberate in the markets for some time to come," said Jon Nadler, a Kitco Inc. analyst in Montreal.
Decline an Opportunity
A drop in prices may be an opportunity to buy, analysts and traders said.
"This is the only metal we would wish to be long of," said Dennis Gartman, editor of the Gartman Letter.
Gold may fall to $800 before rebounding to a record when investors realize the U.S. government has exhausted tools to revive the economy, said Tom Winmill, a New-York based portfolio manager of the Midas Fund. In December, he predicted gold may average $1,500 in the fourth quarter of 2010.
"The Fed won't be able to raise rates, given the employment situation and current fiscal burden. Conditions are in place for higher gold prices," said Winmill.
Notable Quotes
"TMM is a favorite; it just had another record-breaking quarter." (5/24/13) Timmins Gold Corp. - The Gold Report Interview with Ivan Lo More >
"We are comfortable with CSI's ability to begin pouring gold by Q4/13." (5/16/13) Colossus Minerals Inc. - Joseph Fazzini, Dundee Securities More >
"BTO reported solid Q1/13 results; its balance sheet remains strong." (5/16/13) B2Gold Corp. - Morning Coffee More >
"The bankable feasibility study results on SGC's Asmara are positive." (5/16/13) Sunridge Gold Corp. - Adam Lucas, Ocean Equities More >
"Free cash flow at AR should be stronger in H2/13 as production ramps up at La Colorada." (5/15/13) Argonaut Gold Inc. - Christos Doulis, Stonecap Securities More >
Gold at 3-Month Low Offers Opportunity
Source: Bloomberg, Pham-Duy Nguyen (2/5/10)
"The Fed won't be able to raise rates. . .conditions are in place for higher gold prices"
More Experts
"MND's Costerfield delivered another solid quarter across all metrics." (5/15/13) Mandalay Resources Corp. - Benjamin Asuncion, Haywood Securities More >
"We favor SVL as it continues in 2013 with strong production numbers." (5/15/13) SilverCrest Mines Inc. - Philip Ker, PI Financial More >
"Drilling the remaining strike length could more than double INM's La Cigarra resource." (5/22/13) International Northair Mines Ltd. - The Gold Report Interview with Maria Smirnova More >
"BAR's Bug Lake zone has grown by 350m and remains open." (5/14/13) Balmoral Resources Ltd. - Erik Bermel, M Partners More >
"ROG's Burkina Faso deposit will be easy to mine, inexpensive to build and very profitable." (5/20/13) Roxgold Inc. - The Gold Report Interview with Brent Cook More >